- Will there be a new deal or extension of negotiations?
With just two days remaining to the expiration date on the deal between Botswana and De Beers, questions are emerging about whether the intense negotiations will end without a new deal or the negotiations will be extended.
Giving an update this week, the Minister of Mineral Resources, Green Technology and Energy Security, Lefoko Moagi, did not deny or confirm reports that Botswana is pushing for a 50 percent share of mined diamonds for direct marketing by state-owned company.
“Negotiations are ongoing and I wouldn’t want to compromise them,” he said on Btv this week.
The current agreement – which has been in place for several decades – has played a pivotal role in establishing Botswana as a leading diamond producer in the world but is considered an outdated raw deal by the government.
Under the existing arrangement, De Beers and the Botswana Government are equal partners in Debswana, the 50-50 joint venture that operates the mines.
However, Anglo American owns 85 percent of De Beers while Botswana holds 15 percent of the parent company of the global diamond giant.
Okavango Diamond Company
Led by President Mokgweetsi Masisi, the government of Botswana is keen on increasing its share of mined diamonds allocated to Okavango Diamond Company to sell for the government to 50 percent.
This move, if successful, would grant Botswana greater control over its precious diamond resources and potentially unlock significant economic benefits for the country.
Negotiations between the two parties have reportedly been challenging and at times acrimonious, with both sides digging in their heels to secure a deal that aligns with their respective interests.
Botswana’s push for a larger stake is rooted in its desire to maximise benefits from the value chain by beneficiation and marketing.
President Masisi has emphasised the importance of obtaining a fairer and more equitable agreement that reflects the ultimate ownership of the resource that is pivotal to the country’s developmental aspirations.
De Beers – which has a long history of expertise in every aspect of Botswana’s diamond sector, has urged for a cautious approach, emphasising the need for maintaining balance to support sustainable economic growth.
Industry experts and analysts are closely monitoring the negotiations, recognising the potential ripple effects that a revised deal could have on the global diamond trade.
With only two days to the 30 June deadline on Friday this week, the need to find common ground and to reach a mutually beneficial agreement must be keener than ever.
This is because the outcome of the protracted negotiations will have far-reaching implications not only for Botswana and De Beers but for the broader diamond market as well.
The nation and stakeholders worldwide eagerly await an announcement in the coming days.